Brown's comeback

In all it was a well-executed speech for a Prime Minister under siege and as ministers and activists

Gordon Brown's Labour Conference speech was never going to be the 'make-or-break' point which many commentators were trying to engineer, but he certainly used the opportunity to take on his critics and win back the public. 

Progress's editorial ( in its conference edition of the magazine argued that the crucial thing the Prime Minister should do in his speech was to take responsibility for the government's mistakes in the last year, and the 10p tax debacle in particular. So it was good to see that he admitted early on in the speech that it was indeed a mistake and that taking the side of hard-working families will be a priority henceforth. It wasn't as explicit an apology as Tony Blair made over the 75p pension rise in 2000, but it was welcome nevertheless.

We also suggested that the PM should use his speech to argue that the government can no longer make the changes to Britain it seeks by governing by central dictat and that there needed to be a new contract between citizen and state. There was a reference to the changing role of the state when Gordon said: "Let us be clear the modern role of government is not to provide everything, but it must be to enable everyone." It was a shame, however that he didn't go much further than that.

There were other elements which suggested he'd listened to people's concerns. For instance it was a good move to pledge that as families have to "make economies to make ends meet" so the government too "will ensure that we get value for money out of every single pound" of taxpayers' money. Though he didn't go as far as we did and suggest that the size of Whitehall should be cut by a quarter or that the number of government ministers should be whittled down, but I guess he needs as many members of the PLP on the payroll as possible at the moment...

Progress has long campaigned for greater UK commitment to expose and act on the human rights abuses in Burma, Zimbabwe and Darfur, so Gordon's reiterated plea from last year's conference speech that the words 'never again' should not become "just a slogan" and should be instead "the crucible in which our values are tested" was welcome. But as in so many areas of government, the fine words of a speech are barely translated into practice when the stage set is dismantled. Let's hope that this year sees more action from our government in putting pressure on those regimes which think they can transgress international law without fear of retaliation.

I wasn't so sure whether the more populist measures in the speech might be storing up problems for the future. For example, while I can see why those suffering from cancer will see real benefit from the pledge to not charge for their prescriptions, won't this simply create even more inconsistency in an already byzantine system of charges and how do we respond to patients with other potentially life-threatening illnesses? More popular on the doorstep by far would have been to agree to abolish hospital car parking charges and telephone charges.

I also wasn't convinced that the move to charge migrants for use of public services will work in practice and doesn't it send the wrong signal at a time when our economy will increasingly rely on migrant labour? Are we ready to charge them for the use of schools and surely not for emergency health care?

But in all it was a well-executed speech for a Prime Minister under siege and as ministers and activists pore over the detail in the weeks to come, it may well provide the starting point for a wider debate about the direction of the government and party.

Jessica Asato is Deputy Director of Progress and a Member of the Fabian Society Executive.
Show Hide image

Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/